Buy side

As many traders and investors take vacations, the municipal market anticipates slight new issuance for the Fourth of July holiday week. The market expects that municipal bonds to be sold this week will total a scant $51.7 million.

Stockton's filing for bankruptcy protection Thursday has already sparked a war of words between the city and one of its largest creditors.

An uninspiring week of frozen yields in the municipal bond market could not put a stop to the inflows pouring into muni bond mutual funds. Muni bond funds saw $625 million of inflows from funds that report their flows weekly for the week ended June 27, compared with net inflows of $555 million the week ended June 20.

Muni bond indexes on the week are down slightly or unchanged. Despite the lackluster week, traders say primary deals have been well-received and yields in the secondary, on moderate activity, have been mixed.

To make more new-issue data available, the MSRB filed a proposed rule change to prohibit dealers from reporting "NRO" unless they also report price and yield information.

In response to a G-17 interpretive notice that takes effect August 2, a SIFMA task force will release a series of documents underwriters can reference as they prepare disclosures to issuers.

A California ballot initiative that would have increased taxes on cigarettes by $1 a pack appears to be finally dead after a tight vote

Tax-exempt funds continued to see negative flows as $1.12 billion fled the funds and total net assets settled at $270.27 billion in the week ended June 25, according to The Money Fund Report, a service of iMoneyNet.com.

As the SEC toys with the possibility of imposing further regulations on money market funds, those close to the $2.6 trillion industry say the revisions are problematic, highly unnecessary, and could seriously undermine the successful operation and existence of the 40-year-old industry.

Refundings have dominated the new supply of municipal bonds so far in 2012. They've been driving up demand by taking higher coupon bonds out of the market

Refundings have dominated the new supply of municipal bonds so far in 2012. They've been driving up demand by taking higher coupon bonds out of the market.

The finances of local and state governments and other muni sectors generally improved from 2010 to 2011, according to McDonnell Investment Management, LLC.

New Rule G-43 requires that broker's brokers make reasonable efforts to obtain fair and reasonable prices when conducting secondary-market "bid-wanted" auctions.

In the aftermath of Moody's Investors Service downgrade of several key U.S. banks late Thursday, it downgraded roughly $64 billion in affected municipal debt Friday afternoon.

At an anticipated $8.11 billion, municipal bond issuance this week should subside slightly. But because investors are neck-deep in heavy cash flows, the market has been absorbing healthy calendars over the past few weeks with only modest concessions to yields.

Mary Schapiro, chairman of the Securities and Exchange Commission, laid out a case for additional money market reforms before the Senate Banking Committee Thursday.

Moody's Investors Service downgraded several key U.S. banks late Thursday, possibly impacting municipal bonds.

Muni bond indexes were mixed on the week as the need to put truckloads of reinvestment money to work pushed investors to buy munis even while yields sat at barrel-scraping levels

The tax-exempt money market sector saw a moderate decrease in cash in the week ended June 18 as $801.2 million exited the funds and total net assets settled at $271.40 billion, according to the Money Fund Report, a service of iMoneyNet.com.